Putin Ally at Uralkali Says Belarus Reunion Isn’t Top Aim

By Yuliya Fedorinova and Elena Mazneva -
Mar 11, 2014

Sergey Chemezov, the associate of
President Vladimir Putin nominated to OAO Uralkali’s board, said
his prime objective in joining the Russian potash producer isn’t
to help it restore a marketing venture with Belarus.

Chemezov, who heads Russian industrial corporation Rostec,
said in an interview he intends rather to use his position at
Uralkali to support the business objectives of the state-owned
organization by expanding cooperation with the potash supplier.

Uralkali in July broke up a potash venture with Belarus
that accounted for about 40 percent of global exports of the
soil nutrient, accusing its partner of selling cargoes outside
their marketing agreement. Ownership of Uralkali has since
changed, among the conditions Belarus President Aleksandr Lukashenko set before he would allow a reconciliation.

“My agreement to join the board shouldn’t be related to
any kind of strengthening of Uralkali’s position in possible
talks with Belarus to restore the trading partnership,”
Chemezov said in Moscow. “I am not a specialist in Belarus.”

Chemezov has known Putin since they both lived in Dresden
in the former East Germany in the 1980s, where the future
president was a KGB officer. They later both worked in the
administration of President Boris Yeltsin.

Mining Deals

Chemezov was nominated to Uralkali’s board by billionaire
Mikhail Prokhorov’s Onexim Group, which holds a 27 percent stake
in the world’s biggest potash producer. Shareholders are due to
vote on the nomination on March 24. He may become chairman of
Berezniki-based Uralkali and help facilitate the renewal of
relations between the company and its Belarus partner, Prime
newswire reported on Feb. 24.

Chemezov’s role at Uralkali has more to do with developing
links between the company and businesses like OAO VSMPO-Avisma,
the world’s largest titanium maker and 25 percent owned by
Rostec, he said.

“I agreed to join the Uralkali board because Uralkali
mines carnallite, a component in titanium production, used by
VSMPO-Avisma, and we are interested to expand cooperation in
this field,” he said, adding that he has known Prokhorov for a
long time. Uralkali’s press service declined to comment.

Rostec plans other mining projects, he said.

Boeing Venture

Rostec intends to exercise an option to acquire 25 percent
of the Udokan copper project from Metalloinvest Holding Co.,
controlled by billionaire Alisher Usmanov, Chemezov said.
Rostec’s option on Udokan can be exercised at any time,
Metalloinvest’s press service said. Chemezov is also on the
board of OAO GMK Norilsk Nickel, in which Metalloinvest holds 5
percent stake.

“We are interested in this project as our companies
account for 90 percent of Russia’s consumption of rare earth
metals,” Chemezov said.

The venture between Rostec and ICT Group may invest about
$1 billion in rare-earth projects, including building a
processing facility for the 82,000 metric tons of monazite
concentrate that ICT purchased from stockpiles, Nesis said in
October.

Rostec’s venture with Boeing Co. plans to build the second
stage of the Ural Boeing Manufacturing plant to make titanium
products, which may require an investment of $100 million to
$200 million, Chemezov said.